FBI says Russians were a 'new breed' of spy

Anna Chapman wasn't just a member of one of the largest rings of Russian sleeper agents ever rolled up by the FBI, officials say. The 29-year-old former real estate agent, who became a lingerie model and corporate spokeswoman back in Moscow, represented a new breed of Russian spies adapted to the post-Cold War world.

Chapman and fellow ring member Mikhail Semenko, another young deep-cover agent who worked in a D.C.-area travel agency, were technically skilled and able to work comfortably in a Western culture and did so using their own names, said C. Frank Figliuzzi, FBI assistant director for counterintelligence.

They "were very tech-savvy, very intellectual," Figliuzzi said, adding that Semenko is fluent in five languages, including Chinese.

Both of the new-breed operatives used state-of-the-art wireless computer communications, including burst transmitters that sent encrypted messages by radio in a fraction of a second.

Meanwhile, the older spies in the 11-member ring fell back on techniques that have been used for centuries: invisible ink, handoffs of money called "brush passes," and forged documents. Like Soviet sleeper agents before them, they worked under false identities, called legends, some of them stolen from dead people.

All the veteran operatives had undergone years of intensive training in Russia to pass as ordinary Americans. But with the fall of the Iron Curtain and with open borders, someone in Moscow seems to have realized that training may no longer be necessary.

With the two different approaches, one time-tested and one state of the art, "the Russians were experimenting," said Figliuzzi.

Figliuzzi's comments came Monday as the FBI released tapes, video and documents that offered a window into the bureau's surveillance, which stretched over about a decade.

According to a written surveillance report, an FBI agent watched Chapman buy leggings and hats at Macy's. Later, cameras caught her roaming a department store while a Russian diplomat waited outside.

A surveillance video taken the day before her arrest shows Chapman sitting in a coffee shop with an FBI agent posing as her Russian handler.

Other ring members were shadowed during meetings by a Queens pay phone, in a Brooklyn park or during a stroll around New York's Columbus Circle. The FBI says seemingly mundane pursuits often served as cover for the exchange of encrypted messages or the transfer of cash, all with the long-range goal of penetrating the highest levels of U.S. policymaking.

The FBI watched the ring operate so intensively for so long, Figliuzzi said, that the bureau was able to penetrate the ring's communications network to the point where U.S. agents were able to pose as Russian intelligence officers. "So in a sense we began to own their communications" and Chapman and Semenko came to believe that the undercover FBI agents were their Russian handlers.

The FBI released the material to The Associated Press in response to a Freedom of Information Act request. The investigation was code-named "Ghost Stories," the release of documents on Halloween a coincidence.

While the deep-cover agents didn't steal any secrets, an FBI counterintelligence official told the AP that the spies were making progress to their ultimate goal. They "were getting very close to penetrating U.S. policymaking circles" through a friend of a Cabinet official, Figliuzzi said.

He did not name names, but Russian spy Cynthia Murphy of Montclair, N.J., provided financial planning for venture capitalist Alan Patricof, a political fundraiser with close ties to Bill and Hillary Rodham Clinton.

The linchpin in cracking the case, apparently, was Col. Alexander Poteyev, a highly placed U.S. mole in Russian foreign intelligence, who betrayed the spy ring even as he ran it.

He abruptly fled Moscow just days before the FBI rolled up the operation. Poteyev's role emerged when a Russian military court convicted him in absentia for high treason and desertion. The FBI did not comment on the Poteyev case.

Called "illegals" because they took civilian jobs instead of operating with diplomatic immunity inside Russian embassies and military missions, the spies settled into quiet lives in middle-class neighborhoods and set about trying to network their way into the worlds of finance, technology and government.

What appears to be a family photo of one spy, Donald Heathfield of Cambridge, Mass., shows him graduating from Harvard's John F. Kennedy School of Government in 2000. The school revoked the degree a month after the FBI rolled up the spy ring.

The operation's codename, Ghost Stories, stems from a number of the spies using a technique known among counter-intelligence investigators as "dead doubles" _ taking the identities of people who have died. Tracey Lee Ann Foley, Michael Zottoli, Donald Heathfield and Patricia Mills all used the technique, Figliuzzi said.

The U.S. traded the 10 Ghost Stories spies arrested by federal agents for four Russians imprisoned for spying for the West at a remote corner of a Vienna airport on July 9, in a scene reminiscent of the carefully choreographed exchange of spies at Berlin's Glienicke Bridge during the Cold War.

While freed Soviet spies typically have kept a low profile after their return to Moscow, Chapman became a model, corporate spokeswoman and television personality. Heathfield, whose real name is Andrey Bezrukov, lists himself as an adviser to the president of a major Russian oil company on his LinkedIn account.

The case was brought to a swift conclusion before it could complicate President Barack Obama's campaign to "reset" American relations with the Kremlin, strained by years of tensions over U.S. foreign policy and the 2008 Russian-Georgian war. All 10 of the captured spies were charged with failing to register as foreign agents.

An 11th suspect, Christopher Metsos, who claimed to be a Canadian citizen and was accused of delivering money and equipment to the sleeper agents, vanished after a court in Cyprus freed him on bail. The FBI released surveillance photos of Metsos on Monday.

Figliuzzi said Metsos traveled into the U.S. to provide the other illegals with money. Security measures after the Sept. 11, 2001, terrorist attacks meant he could no longer risk carrying large amounts of cash, prompting the Russians to send officials already in the U.S. to meet with the illegals and pay them.

That could have made the spies more vulnerable to discovery, since governments generally keep a close eye on the movements of foreign diplomats.

But former Soviet intelligence officials now living in the West scratched their heads over what Russia hoped to gain from the sleeper ring.

"In my view this whole operation was a waste of human resources, money and just put Russia in a ridiculous situation," said Oleg Kalugin, a former KGB major general who spied against the U.S. during the Soviet era, in an interview earlier this year. He now lives near Washington.

Alexander Vassiliev, a former KGB officer and journalist who has written extensively about Soviet spying in America, said the illegals were supposed to act as talent spotters and scouts, identifying Americans in positions of power who might be recruited to spill secrets for financial reasons or through blackmail.

Spies with the protection of diplomatic credentials would handle the more delicate task of recruiting and handling the agents.

Moscow's ultimate aim, Vassiliev said, was probably to cultivate a source who could provide day-by-day intelligence on what the president's inner circle was thinking and planning in response to the latest international crisis. But he said there was no evidence the Kremlin made any progress toward that goal.

"How are you going to recruit someone like that, on what basis? That's quite a successful person. Why should he spy for the Russians? I can't see any reason," said Vassiliev, who now lives in London.

In addition to Chapman, the Russian illegals were:

_Vicky Pelaez and Juan Lazaro of Yonkers, N.Y. Lazaro briefly taught a class on Latin American and Caribbean politics at Baruch College. Pelaez wrote pieces highly critical of U.S. policy in Latin America as a columnist for one of the United States' best-known Spanish-language newspapers, El Diario La Prensa.

_Michael Zottoli and Patricia Mills of Arlington, Va. He worked at a telecommunications firm. The couple raised a young son and toddler in their high-rise apartment.

_Cynthia Murphy and her husband, Richard, of Montclair, N.J. He mostly stayed home with their two pre-teen children while she worked for a lower Manhattan-based accounting firm that offered tax advice.

_Heathfield and Tracey Lee Ann Foley of Cambridge, Mass. He worked in sales for an international management consulting firm and peddled strategic planning software to U.S. corporations. She was a real estate agent.

_Semenko of Arlington, Va., who spoke Russian, English, Spanish, Chinese and Portuguese. He worked at the Travel All Russia agency, where co-workers described him as "clumsy" and "quirky." But the FBI described him as linguistically and technically skilled.